Question 1

Intermediate goals are usually achieved within the next year or so.

Accepted Answer

A) True 
 B)False

Question 2

An example of a personal opportunity cost would be

Accepted Answer

A)  Interest lost by using savings to make a purchase. 
B)  Higher earnings on savings that must be kept on deposit a minimum of six months. 
C)  Lost wages due to continuing as a full-time student. 
D)  Time comparing several brands of personal computers. 
E)  Having to pay a tax penalty due to not having enough withheld from your monthly salary. 
A)  Interest lost by using savings to make a purchase. 
B)  Higher earnings on savings that must be kept on deposit a minimum of six months. 
C)  Lost wages due to continuing as a full-time student. 
D)  Time comparing several brands of personal computers. 
E)  Having to pay a tax penalty due to not having enough withheld from your monthly salary.

Question 3

The problem of bankruptcy is associated with overuse and misuse of credit in the ______________ component of financial planning.

Accepted Answer

A)  Sharing 
B)  Savings 
C)  Obtaining 
D)  Borrowing 
E)  Protecting 
A)  Sharing 
B)  Savings 
C)  Obtaining 
D)  Borrowing 
E)  Protecting

Question 4

The rising or falling of prices that causes changes in buying power is referred to as ____________ risk.

Accepted Answer

A)  interest-rate 
B)  inflation 
C)  income 
D)  personal 
E)  liquidity 
A)  interest-rate 
B)  inflation 
C)  income 
D)  personal 
E)  liquidity

Question 5

Which of the following goals would be the easiest to implement and measure?

Accepted Answer

A)  Put money into an investment fund. 
B)  Reduce credit card debt. 
C)  Save funds for an annual vacation. 
D)  Save $100 a month to create a $2,400 emergency fund in 2 years. 
E)  Spend less each month. 
A)  Put money into an investment fund. 
B)  Reduce credit card debt. 
C)  Save funds for an annual vacation. 
D)  Save $100 a month to create a $2,400 emergency fund in 2 years. 
E)  Spend less each month.

Question 6

As borrowing by consumers and businesses increases, interest rates are likely to decrease.

Accepted Answer

A) True 
 B)False

Question 7

Annual earnings on a $500 Certificate of Deposit earning 3% would be

Accepted Answer

A)  $5.00 
B)  $15.00 
C)  $25.00 
D)  $30.00 
E)  $500.00 
A)  $5.00 
B)  $15.00 
C)  $25.00 
D)  $30.00 
E)  $500.00

Question 8

If a $10,000 investment earns interest of $500 in one year, what is its rate of return?

Accepted Answer

A)  .5 percent 
B)  10 percent 
C)  50 percent 
D)  75 percent 
E)  100 percent 
A)  .5 percent 
B)  10 percent 
C)  50 percent 
D)  75 percent 
E)  100 percent

Question 9

Robert Brown is interested in attending a concert next weekend. Unfortunately, he is scheduled to work. If he finds a substitute for his shift so he can attend the concert, what kind of cost is he incurring?

Accepted Answer

A)  Personal opportunity cost relating to health 
B)  Personal opportunity cost relating to time 
C)  Personal opportunity cost relating to abilities 
D)  Personal opportunity cost relating to knowledge 
E)  Unexpected personal opportunity cost 
A)  Personal opportunity cost relating to health 
B)  Personal opportunity cost relating to time 
C)  Personal opportunity cost relating to abilities 
D)  Personal opportunity cost relating to knowledge 
E)  Unexpected personal opportunity cost

Question 10

If Melinda Miller estimates that her $100 weekly grocery bill will increase at an annual inflation rate of 4%, what should her weekly grocery bill be in 3 years?

Accepted Answer

A) $100.00 
B) $112.00 
C) $112.50 
D) $114.00 
E) $121.60 
A) $100.00 
B) $112.00 
C) $112.50 
D) $114.00 
E) $121.60

Question 11

Increased consumer saving and investing is likely to be accompanied by

Accepted Answer

A)  Lower union wages 
B)  Higher interest rates 
C)  Lower production costs 
D)  Lower interest rates 
E)  Higher inflation 
A)  Lower union wages 
B)  Higher interest rates 
C)  Lower production costs 
D)  Lower interest rates 
E)  Higher inflation

Question 12

Future value computations are often referred to as

Accepted Answer

A)  Discounting. 
B)  Present value. 
C)  Compounding. 
D)  Simple interest. 
E)  An annuity. 
A)  Discounting. 
B)  Present value. 
C)  Compounding. 
D)  Simple interest. 
E)  An annuity.

Question 13

There are only 3 possible courses of action when developing alternatives for decision making.

Accepted Answer

A) True 
 B)False

Question 14

There are only 3 methods of calculating time value of money.

Accepted Answer

A) True 
 B)False

Question 15

Patrick Guitman recently graduated from college with $20,000 in student loans and $5,000 in credit card debt. He usually makes minimum payments on his debt and he has been late with three payments in the last year. He wants to buy a new car but was told that his interest rate on a loan would be very high. What is the most likely reason this might be so?

Accepted Answer

A)  General interest rates are very low 
B)  His credit rating is poor which results in a higher interest rate 
C)  He already has a student loan outstanding 
D)  Recent graduates are not allowed to have more than $25,000 in debt outstanding 
E)  Interest rates must be tied to the CPI 
A)  General interest rates are very low 
B)  His credit rating is poor which results in a higher interest rate 
C)  He already has a student loan outstanding 
D)  Recent graduates are not allowed to have more than $25,000 in debt outstanding 
E)  Interest rates must be tied to the CPI

Question 16

The difficulty of converting savings and investments to cash is referred to as ____________ risk.

Accepted Answer

A)  interest-rate 
B)  inflation 
C)  income 
D)  personal 
E)  liquidity 
A)  interest-rate 
B)  inflation 
C)  income 
D)  personal 
E)  liquidity

Question 17

If inflation is expected to be 8 percent, how long will it take for prices to double?

Accepted Answer

A)  6 years 
B)  7 years 
C)  9 years 
D)  12 years 
E)  18 years 
A)  6 years 
B)  7 years 
C)  9 years 
D)  12 years 
E)  18 years

Question 18

The tangible and intangible factors that create a less than desirable situation is referred to as ____________ risk.

Accepted Answer

A)  interest-rate 
B)  inflation 
C)  income 
D)  liquidity 
E)  personal 
A)  interest-rate 
B)  inflation 
C)  income 
D)  liquidity 
E)  personal

Question 19

The consumer price index measures:

Accepted Answer

A)  The prices of goods and services in the United States 
B)  The prices of goods and services in Bolivia 
C)  The average change in prices of goods and services of urban consumers 
D)  The change in prices of goods and services around the world 
E)  None of the above 
A)  The prices of goods and services in the United States 
B)  The prices of goods and services in Bolivia 
C)  The average change in prices of goods and services of urban consumers 
D)  The change in prices of goods and services around the world 
E)  None of the above

Question 20

Which of the following intermediate goals is stated most clearly using the SMART approach?

Accepted Answer

A)  Buy a car for less than $15,000 within 6 months 
B)  Retire in 10 years at age 65 with $2,000,000 in my 401(k) account 
C)  Purchase a house with a mortgage no greater than $150,000 within 5 years 
D)  Set up an emergency fund 
E)  Invest $50 per month for the next 12 years for my nephew's college fund 
A)  Buy a car for less than $15,000 within 6 months 
B)  Retire in 10 years at age 65 with $2,000,000 in my 401(k) account 
C)  Purchase a house with a mortgage no greater than $150,000 within 5 years 
D)  Set up an emergency fund 
E)  Invest $50 per month for the next 12 years for my nephew's college fund

Intermediate goals are usually achieved within the next year or so.

An example of a personal opportunity cost would be

The problem of bankruptcy is associated with overuse and misuse of credit in the ______________ component of financial planning.

The rising or falling of prices that causes changes in buying power is referred to as ____________ risk.

Which of the following goals would be the easiest to implement and measure?

As borrowing by consumers and businesses increases, interest rates are likely to decrease.

Annual earnings on a $500 Certificate of Deposit earning 3% would be

If a $10,000 investment earns interest of $500 in one year, what is its rate of return?

Robert Brown is interested in attending a concert next weekend. Unfortunately, he is scheduled to work. If he finds a substitute for his shift so he can attend the concert, what kind of cost is he incurring?

If Melinda Miller estimates that her $100 weekly grocery bill will increase at an annual inflation rate of 4%, what should her weekly grocery bill be in 3 years?

Increased consumer saving and investing is likely to be accompanied by

Future value computations are often referred to as

There are only 3 possible courses of action when developing alternatives for decision making.

There are only 3 methods of calculating time value of money.

The difficulty of converting savings and investments to cash is referred to as ____________ risk.

If inflation is expected to be 8 percent, how long will it take for prices to double?

The tangible and intangible factors that create a less than desirable situation is referred to as ____________ risk.

The consumer price index measures:

Which of the following intermediate goals is stated most clearly using the SMART approach?

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters

Exam 1: Personal Financial Planning in Action

Intermediate goals are usually achieved within the next year or so.

An example of a personal opportunity cost would be

The problem of bankruptcy is associated with overuse and misuse of credit in the ______________ component of financial planning.

The rising or falling of prices that causes changes in buying power is referred to as ____________ risk.

Which of the following goals would be the easiest to implement and measure?

As borrowing by consumers and businesses increases, interest rates are likely to decrease.

Annual earnings on a $500 Certificate of Deposit earning 3% would be

If a $10,000 investment earns interest of $500 in one year, what is its rate of return?

Robert Brown is interested in attending a concert next weekend. Unfortunately, he is scheduled to work. If he finds a substitute for his shift so he can attend the concert, what kind of cost is he incurring?

If Melinda Miller estimates that her $100 weekly grocery bill will increase at an annual inflation rate of 4%, what should her weekly grocery bill be in 3 years?

Increased consumer saving and investing is likely to be accompanied by

Future value computations are often referred to as

There are only 3 possible courses of action when developing alternatives for decision making.

There are only 3 methods of calculating time value of money.

The difficulty of converting savings and investments to cash is referred to as ____________ risk.

If inflation is expected to be 8 percent, how long will it take for prices to double?

The tangible and intangible factors that create a less than desirable situation is referred to as ____________ risk.

The consumer price index measures:

Which of the following intermediate goals is stated most clearly using the SMART approach?

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters